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Criminal intent cannot be more controversial and open to question than when it is applied to the bouncing of cheques

Gulf News

Dubai: In criminal law, criminal intent is of utmost importance in establishing a crime. Since intent has mostly to do with a state of mind, the criminality of an offence can be determined only on the basis of external and circumstantial evidences or as in most cases inferences. By implication, harm caused innocently cannot have the force of mens rea, the Latin equivalent of guilty mind, and in such cases criminal prosecution is untenable.

Criminal intent cannot be more controversial and open to question than when it is applied to the bouncing of cheques. The issue merits a thorough re-examination, as the UAE authorities are currently in the process of doing. But as of today, the position is that anyone who has issued a cheque without enough money in the bank at the time of its presentation is liable to be arrested and sent to jail without any question being asked or any explanation given. The following real life experience shows how blatantly unfair this can be to some of the parties and in certain cases all parties involved.

A, B and C are three businessmen, known to one another for fairly long periods and have done business together. C has issued a cheque in favour of A, against which A has issued a cheque in favour of B, all in good faith and the firm belief that the accounts are funded. To make the matter doubly sure, A checks with C about the timely clearance of his cheque and gets an affirmative answer as money has been debited from his account. But when B presents A’s cheque, it is declined for lack of funds.

Apart from the embarrassment and loss of credibility suffered due to the return of the cheque, A gets a call from his bank, asking him to explain the bounced cheque and is even penalised with a black point, four of which will require blacklisting of his account under the stringent new central bank regulations. On investigation, it emerges that although money had been deducted from C’s account, it was not promptly credited to A.

A’s troubles are not over with that. The payment to B was part of a three-part transaction, which entitled A to acquire a business from B. But the deal had a rider that in the event of any payment default, A would forfeit the claim to transfer and also risk losing the first two instalments. A nearly lost the deal, which was salvaged only because B was well-disposed towards him.

Imagine what would have happened if B used that as an excuse not to go through the deal and worse still if he presented the bounced cheque to the police. A would be straightaway sent behind bars, no questions asked.

Now who will take responsibility for all these troubles of A? If at all there is any lapse, it is on the part of the bank; so the bank owes him an answer. Similarly, can the central bank as regulator look away from what has happened? Most importantly, the law makers have to consider how such well-meaning actions do not end up being viewed as offences with a criminal intent.

If the circumstances leading to the offence are gone into, a vast majority of cheque bouncing cases in the UAE might turn out to be without any criminal intent. Most of those who suffered the bitter experience may have heart rending stories to tell on how they became victims of the circumstances and landed up in jail. Thankfully, there is opinion building up in favour of replacing the current laws, which treat cheque bouncing as a criminal offence without any investigation.

The banks themselves are now arguing in favour of a change so that the criminal intent behind the offence is given due consideration in deciding how to treat such cases. An ideal solution would be one that allows the treatment of deserving cases differently while at the same time providing for highly deterrent punishment for attempts to cheat and commit fraud. In all likelihood,it is happening sooner than later.